UBS Tipped for Success

Jan 8, 2013 1:54 pm GMT

UBS, whose widely-praised investment banking restructuring was overshadowed late last year by the Kweku Adoboli and Libor-fixing scandals, was today tipped for success in a clutch of research reports on European banks. Giles Turner, from efinancialnews.com, dug around to find out why. Here’s a taster of his article.

Reuters

By Giles Turner

UBS underwent radical restructuring in 2012 and in October announced plans to cut 10,000 staff and all-but-exit fixed-income trading, a capital-intensive business. The move to slim its investment bank was roundly praised by analysts at the time.

In November, Morgan Stanley said in a note that the sweeping changes at UBS “have raised the stakes” for rivals.

UBS’s share price has risen by over 18% since the announcement–the stock was trading at €16.34 this morning–and according to Andrew Lim, banks analyst at Espirito Santo, it may have further to run.

In a report this morning, Mr. Lim noted that UBS has been trailing the SX7P Banks Index by 6% in the last month, and that the bank’s fourth-quarter results on Feb. 5 “will be the key catalyst for UBS to re-rate further to our target price, reflecting faster RWA reduction and with much lower exit losses than the market currently anticipates.”

UBS was also among the top choices of analysts from Berenberg, Barclays, and Morgan Stanley.